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Cuba tries to keep the lights on

Cuba gets plenty of oil from Venezuela. So why is it adopting "extreme measures" to avoid blackouts?

Venezuela’s petroleum shipments to Cuba increased 32 percent last year, as the island’s newly upgraded Cienfuegos refinery has become a processing center for Venezuelan oil bound for regional member states of the Chavez-led energy alliance, PetroCaribe.

Cuba is one of more than a dozen nations in the region that receive oil shipments on favorable credit terms as part of the PetroCaribe agreement. Cuba pays Venezuela back for some of the oil shipments by sending more than 30,000 doctors, nurses and other professionals to work in social programs created by the Chavez government.

But just as Cuba’s petroleum trade has soared, revenue is plummeting from other key exports like nickel, pharmaceuticals and tobacco products. Foreign trade is down 36 percent this year, as the global recession and $10 billion in damage from three 2008 hurricanes have drained Cuba’s finances.

Thus, analysts say, the more oil Cuba can save, the more it can sell abroad.

“I think it is actually a prudent effort on the part of the government that acknowledges the reality that Cuba is in dire need of hard currency,” said Jonathan Benjamin-Alvarado, a U.S. expert on Cuban energy at the University of Nebraska at Omaha.

“The extent to which they can conserve or curb consumption in order to reserve refined fuels for re-export is logical, but yet another hardship for the people,” he added.

Benjamin-Alvarado and other experts said Cuba’s biggest problem isn’t oil supplies but a decrepit energy infrastructure and a lack of power generation capacity.

“There aren’t enough power plants, and several of the plants they do have are in need of repairs,” said one foreign businessman who works in the energy sector on the island.

Cuba isn’t the only Latin American nation struggling with power shortages lately. Low rainfall has sapped hydroelectric capacity in Venezuela and Ecuador, while Brazil’s biggest cities went dark earlier this month when thunderstorms produced a colossal network crash.

Cuba’s problems, unfortunately, are of the man-made variety. As debts continue to mount and trade slips, energy rationing is likely to continue. And while blackouts are always a source of tension on the island, they’re far easier for the government to impose during the winter, when temperatures — and Cubans’ frustrations — tend to ease.

“People don’t mind when it’s cool, but on warm days they complain a lot,” said one Cuban woman who works in the office building of a state-run company. The only places in the building where air conditioning is still allowed are the rooms with equipment that can’t be allowed to overheat.

“They’re putting in lots of fans,” she said.

http://www.globalpost.com/dispatch/cuba/091117/cuba-energy-shortages